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Queensland Premier Anna Bligh says she makes no apologies for a mining giant’s decision to cancel a major project because of state environmental laws.

Cape Alumina Limited on Monday advised the Australian Securities Exchange its Pisolite Hills project has been rendered unviable by the Wild Rivers legislation, which protects pristine river systems by limiting development.

In a project and resource update, Cape Alumina said the bauxite proposed to be mined at Pisolite Hills had been reduced by 45 per cent as a result of the imposition of “arbitrary, 500m wide buffers – so-called High Preservation Areas (HPAs) – in the vicinity of the project”.

The company argues that the buffers should be only 300 metres, but the government has refused to decrease them.

“The decision that we’ve been forced to make today, as a result of Wild Rivers [laws], has taken away what we thought we had, which was the right to develop our mining operations in that part of the world unimpeded, and that’s changed,” he told reporters.

The cancellation of the project had cost $1.2 billion in new economic activity and hundreds of new jobs, he said.

Dr Messenger said $21 million had already been invested in the project and the company would continue with its environmental impact study (EIS) in case a future government changed the laws.

Apart from Rio Tinto, Cape Alumina is the largest tenement holder on Cape York and has seven exploration projects under way. Fast-tracking those will become Cape Alumina’s focus, he said.

Ms Bligh said it was no coincidence the company made the announcement on the Pisolite Hills project the day federal Opposition Leader Tony Abbott was to introduce a private member’s bill to overturn the laws.

Mr Abbott has since delayed the bill, pending a tour of Cape York.

“There’s no surprises in a mining company trying to put pressure on a government to let them mine wherever they like,” the premier told reporters.

Ms Bligh said it was appropriate to protect the sensitive area and made no apologies for doing so.

“A mining approval is not a right,” she said.

“For any mining company you have to satisfy the environmental requirements . . . That’s appropriate.”

Environmentalists have labelled the project’s scrapping as a win for the environment, saying endangered animals, pristine estuaries and eucalyptus forests will be saved.

“Cape Alumina’s plan for a bauxite mine in the Cape is akin to drilling for oil in the Great Barrier Reef,” Queensland Wilderness Society’s Glenn Walker said.

“The news that the mine is dead is fantastic news.”

But Opposition leader John-Paul Langbroek said the announcement should act as an alarm bell for the Labor government to immediately overhaul the legislation.

“Hundreds of indigenous jobs in Cape York have today been consigned to the unemployment scrapheap as a result of Labor’s Wild Rivers laws,” Mr Langbroek said in a statement.

Cape Alumina said state Natural Resources Minister Stephen Robertson had rejected the advice of independent environment experts and his own department, who had recommended 300-metre-wide buffers.

Mr Robertson defended the government’s stance and said he would not decrease the 500-metre buffer zone around the wild rivers.

“We have some of the most stringent environmental laws in the world, and justifiably so, because we do not want to see our environment damaged at the expense of industrial development or mining development,” he told reporters in Brisbane on Monday.

“Obviously they are hoping that there may be a change of government in the future that may result in less stringent environmental standards coming into play in Cape York,” he said.

“If that’s what their belief is it will be fought out at the next election, quite dramatically so.”